Some federal student loans provide a subsidized interest
benefit, where the federal government pays the interest during the
in-school period, grace period and other authorized deferment
periods.

Federal student loans have several provisions for borrowers who
are encountering financial hardship, including deferments,
forbearances and income-driven repayment plans.

When a borrower doesn't pay the interest on an unsubsidized
loan as it accrues, the unpaid interest is capitalized (added to
the loan balance). This can occur during a deferment or
forbearance. Unpaid interest on federal student loans is capitalized
once, at the end of the deferment or forbearance period. Unpaid
interest on private student loans may be capitalized more
frequently.

Federal student loans offer several loan forgiveness options,
including public service loan forgiveness, while private student loans
do not.

Federal student loans do not involve credit scores, minimum
income thresholds or maximum debt-to-income and debt-service-to-income
ratios. The Federal PLUS loan, however, does require the borrower to
not have an adverse credit history.

Federal student loans do not require the borrower to have a
creditworthy cosigner. More than 90% of private student loans to
undergraduate students and 75% of private student loans to graduate
and professional school students require cosigners.

Federal student loans provide deferments and forbearances for
up to three years in duration. Most private student loans limit
forbearances to one year in total duration.

Federal student loans provide death and disability
discharges. Not all lenders offer similar benefits on private student
loans.

Private student loans offer personalized pricing, such
as lower interest rates for borrowers with better credit scores and
students who are enrolled in more lucrative academic majors at elite
colleges and universities.

Private student loans may be less expensive than Federal PLUS
loans for borrowers (or cosigners) with very good or excellent credit
(e.g., 750+ credit scores). Otherwise, private student loans may have
higher costs than federal student loans.